Bitcoin (BTC) is trapped in a no man’s land concerning $6,200 and $6,600, technical charts show.
The bear flag breakdown witnessed on Monday was supposed to generate a drop to $6,000 (February minimal). Nevertheless, the trendline connecting the June minimal and Aug. 11 minimal spoiled the bear occasion.
The foremost cryptocurrency bounced off the trendline guidance of $6,202 on Monday and rose again over $6,350 in the past 24 hrs, neutralizing the quick bearish outlook.
At push time, BTC is shifting hands at $6,320 on Bitfinex – up 1.23 per cent on the day.
Though BTC’s defense of the trendline guidance is encouraging, a bearish-to-bullish pattern modify would be confirmed only after BTC has moved over the Sept. 14 higher of $6,600.
Every day chart
As can be viewed, the trendline from June lows or the reduce close of the pennant pattern has labored as a strong guidance this month and is the amount to defeat for the bears.
As of writing, the pennant guidance is positioned at $6,225. A UTC close beneath that amount would affirm a pennant breakdown – a bearish continuation pattern – which would signal a revival of the market-off from the May highs near $10,000.
Further more, the breakdown could verify high priced, as the relative power index (RSI) of 41.00 (bearish and effectively over oversold degrees) demonstrates a good deal of scope for a price tag drop.
In the meantime, on the increased facet, a shift over $6,600 (Sept. 14 higher) would negate Monday’s major bearish outside-day candle and affirm a small-time period bullish reversal.
The bear flag breakdown on the 4-hour chart unsuccessful to deliver a bearish shift towards $6,000. Much more importantly, BTC has re-entered the flag pattern, weakening the bearish circumstance.
That mentioned, the stacking order of the 50-candle going average (MA), beneath the 100-candle MA, beneath the 200-candle MA, implies the path of the very least resistance is to the draw back.
Further more, the RSI is commencing to roll above in favor of the bears. So, it appears risk-free to say that potential customers of a bull breakout over $6,600 are minimal.
- BTC lacks a clear bias, possessing defended the pennant guidance in the past two days.
- Pennant breakdown will very likely generate a drop to essential supports of $5,859 (August minimal) and $5,755 (June minimal).
- BTC bulls may truly feel emboldened if the rebound from the pennant guidance viewed on Monday is followed by a convincing shift past $6,600 (Sept. 14 higher) in the future few days. In this circumstance, BTC could assault the psychological hurdle of $7,000.
Disclosure: The author holds no cryptocurrency assets at the time of writing.